THIRD DIVISION
 
UNIWIDE SALES REALTY AND G.R. No. 126619
RESOURCES CORPORATION,
Petitioner, Present:
 
 
QUISUMBING, J.,
Chairperson,
CARPIO,
- versus - CARPIO MORALES
TINGA, and
VELASCO, JR., JJ.
TITAN-IKEDA CONSTRUCTION
AND DEVELOPMENT CORPORATION,
Respondent. Promulgated:
 
December 20, 2006
 
x ------------------------------------------------------------------------------------x
DECISION
 
TINGA, J.:
 
This Petition for Review on Certiorari under Rule 45 seeks
[1]
the partial reversal of the 21 February 1996 Decision of the
Court of Appeals Fifteenth Division in CA-G.R. SP No. 37957
[2]
which modified the 17 April 1995 Decision of the
Construction Industry Arbitration Commission (CIAC).
 
The case originated from an action for a sum of money
filed by Titan-Ikeda Construction and Development
Corporation (Titan) against Uniwide Sales Realty and
Resources Corporation (Uniwide) with the Regional Trial Court
[3]
(RTC), Branch 119, Pasay City arising from Uniwides non-
payment of certain claims billed by Titan after completion of
three projects covered by agreements they entered into with
each other. Upon Uniwides motion to dismiss/suspend
proceedings and Titans open court manifestation agreeing to
the suspension, Civil Case No. 98-0814 was suspended for it to
[4]
undergo arbitration. Titans complaint was thus re-filed with
[5]
the CIAC. Before the CIAC, Uniwide filed an answer which
was later amended and re-amended, denying the material
allegations of the complaint, with counterclaims for refund of
overpayments, actual and exemplary damages, and attorneys
fees. The agreements between Titan and Uniwide are briefly
described below.
 
 
 
 
[6]
PROJECT 1.
 
The first agreement (Project 1) was a written Construction
Contract entered into by Titan and Uniwide sometime in May
1991 whereby Titan undertook to construct Uniwides
Warehouse Club and Administration Building in Libis, Quezon
City for a fee of P120,936,591.50, payable in monthly progress
 [7]
billings to be certified to by Uniwides representative. The
parties stipulated that the building shall be completed not later
than 30 November 1991. As found by the CIAC, the building
[8]
was eventually finished on 15 February 1992 and turned
over to Uniwide.
 
PROJECT 2.
 
Sometime in July 1992, Titan and Uniwide entered into the
second agreement (Project 2) whereby the former agreed to
construct an additional floor and to renovate the latters
warehouse located at the EDSA Central Market Area in
Mandaluyong City. There was no written contract executed
between the parties for this project. Construction was allegedly
to be on the basis of drawings and specifications provided by
Uniwides structural engineers. The parties proceeded on the
basis of a cost estimate of P21,301,075.77 inclusive of Titans
20% mark-up. Titan conceded in its complaint to having
received P15,000,000.00 of this amount. This project was
completed in the latter part of October 1992 and turned over to
Uniwide.
[9]
PROJECT 3.
 
The parties executed the third agreement (Project 3) in May
1992. In a written Construction Contract, Titan undertook to
construct the Uniwide Sales Department Store Building in
Kalookan City for the price of P118,000,000.00 payable in
progress billings to be certified to by Uniwides representative.
[10]
It was stipulated that the project shall be completed not
later than 28 February 1993. The project was completed and
turned over to Uniwide in June 1993.
 
Uniwide asserted in its petition that: (a) it overpaid Titan for
unauthorized additional works in Project 1 and Project 3; (b) it
is not liable to pay the Value-Added Tax (VAT) for Project 1; (c)
it is entitled to liquidated damages for the delay incurred in
constructing Project 1 and Project 3; and (d) it should not have
been found liable for deficiencies in the defectively
constructed Project 2.
 
An Arbitral Tribunal consisting of a chairman and two
members was created in accordance with the CIAC Rules of
Procedure Governing Construction Arbitration. It conducted a
preliminary conference with the parties and thereafter issued
a Terms of Reference (TOR) which was signed by the parties.
The tribunal also conducted an ocular inspection, hearings,
and received the evidence of the parties consisting of affidavits
which were subject to cross-examination. On 17 April 1995,
after the parties submitted their respective memoranda, the
[11]
Arbitral Tribunal promulgated a Decision, the decretal
portion of which is as follows:
 
 
 
WHEREFORE, judgment is hereby rendered as
follows:
 
On Project 1 Libis:
 
[Uniwide] is absolved of any liability for the claims
made by [Titan] on this Project.
 
Project 2 Edsa Central:
 
[Uniwide] is absolved of any liability for VAT payment
on this project, the same being for the account of the
[Titan]. On the other hand, [Titan] is absolved of any
liability on the counterclaim for defective construction
of this project.
 
[Uniwide] is held liable for the unpaid balance in the
amount of P6,301,075.77 which is ordered to be paid to
the [Titan] with 12% interest per annum commencing
from 19 December 1992 until the date of payment.
 
On Project 3 Kalookan:
 
[Uniwide] is held liable for the unpaid balance in the
amount of P5,158,364.63 which is ordered to be paid to
the [Titan] with 12% interest per annum commencing
from 08 September 1993 until the date of payment.
 
[Uniwide] is held liable to pay in full the VAT on this
project, in such amount as may be computed by the
Bureau of Internal Revenue to be paid directly thereto.
The BIR is hereby notified that [Uniwide] Sales Realty
and Resources Corporation has assumed responsibility
and is held liable for VAT payment on this project. This
accordingly exempts Claimant Titan-Ikeda Construction
and Development Corporation from this obligation.
 
Let a copy of this Decision be furnished the Honorable
Aurora P. Navarette Recina, Presiding Judge, Branch 119,
Pasay City, in Civil Case No. 94-0814 entitled Titan-Ikeda
Construction Development Corporation, Plaintiff versus
 Uniwide Sales Realty and Resources Corporation,
Defendant, pending before said court for information
and proper action.
 
SO ORDERED.[12]
 
Uniwide filed a motion for reconsideration of the 17 April
1995 decision which was denied by the CIAC in its Resolution
dated 6 July 1995. Uniwide accordingly filed a petition for
[13]
review with the Court of Appeals, which rendered the
assailed decision on 21 February 1996. Uniwides motion for
reconsideration was likewise denied by the Court of Appeals in
[14]
its assailed Resolution dated 30 September 1996.
 
Hence, Uniwide comes to this Court via a petition for
review under Rule 45. The issues submitted for resolution of
[15]
this Court are as follows: (1) Whether Uniwide is entitled to
a return of the amount it allegedly paid by mistake to Titan for
additional works done on Project 1; (2) Whether Uniwide is
liable for the payment of the Value-Added Tax (VAT) on Project
1; (3) Whether Uniwide is entitled to liquidated damages for
Projects 1 and 3; and (4) Whether Uniwide is liable for
deficiencies in Project 2.
 
As a rule, findings of fact of administrative agencies and
quasi-judicial bodies, which have acquired expertise because
their jurisdiction is confined to specific matters, are generally
accorded not only respect, but also finality, especially when
[16]
affirmed by the Court of Appeals. In particular, factual
findings of construction arbitrators are final and conclusive
[17]
and not reviewable by this Court on appeal. This rule,
however admits of certain exceptions.
 
In David v. Construction Industry and Arbitration
[18]
Commission, we ruled that, as exceptions, factual findings
of construction arbitrators may be reviewed by this Court
when the petitioner proves affirmatively that: (1) the award
was procured by corruption, fraud or other undue means; (2)
there was evident partiality or corruption of the arbitrators or
of any of them; (3) the arbitrators were guilty of misconduct in
refusing to hear evidence pertinent and material to the
controversy; (4) one or more of the arbitrators were
disqualified to act as such under Section nine of Republic Act
No. 876 and willfully refrained from disclosing such
disqualifications or of any other misbehavior by which the
rights of any party have been materially prejudiced; or (5) the
arbitrators exceeded their powers, or so imperfectly executed
them, that a mutual, final and definite award upon the subject
[19]
matter submitted to them was not made.
 
Other recognized exceptions are as follows: (1) when there
[20]
is a very clear showing of grave abuse of discretion
resulting in lack or loss of jurisdiction as when a party was
deprived of a fair opportunity to present its position before the
Arbitral Tribunal or when an award is obtained through fraud
[21]
or the corruption of arbitrators, (2) when the findings of
[22]
the Court of Appeals are contrary to those of the CIAC, and
[23]
(3) when a party is deprived of administrative due process.
  
Thus, in Hi-Precision Steel Center, Inc. v. Lim Kim Builders,
[24]
Inc., we refused to review the findings of fact of the CIAC
for the reason that petitioner was requiring the Court to go
over each individual claim and counterclaim submitted by the
parties in the CIAC. A review of the CIACs findings of fact
would have had the effect of setting at naught the basic
objective of a voluntary arbitration and would reduce
arbitration to a largely inutile institution. Further, petitioner
therein failed to show any serious error of law amounting to
grave abuse of discretion resulting in lack of jurisdiction on the
part of the Arbitral Tribunal, in either the methods employed
or the results reached by the Arbitral Tribunal, in disposing of
the detailed claims of the respective parties. In Metro
[25]
Construction, Inc. v. Chatham Properties, Inc., we reviewed
the findings of fact of the Court of Appeals because its findings
on the issue of whether petitioner therein was in delay were
contrary to the findings of the CIAC. Finally, in Megaworld
Globus Asia, Inc. v. DSM Construction and Development
[26]
Corporation, we declined to depart from the findings of the
Arbitral Tribunal considering that the computations, as well as
the propriety of the awards, are unquestionably factual issues
that have been discussed by the Arbitral Tribunal and affirmed
by the Court of Appeals.
 
In the present case, only the first issue presented for resolution
of this Court is a question of law while the rest are factual in
nature. However, we do not hesitate to inquire into these
factual issues for the reason that the CIAC and the Court of
Appeals, in some matters, differed in their findings.
 
 We now proceed to discuss the issues in seriatim.
 
Payment by Mistake for Project 1
 
The first issue refers to the P5,823,481.75 paid by Uniwide for
additional works done on Project 1. Uniwide asserts that Titan
was not entitled to be paid this amount because the additional
works were without any written authorization.
 
It should be noted that the contracts do not contain
stipulations on additional works, Uniwides liability for
additional works, and prior approval as a requirement before
Titan could perform additional works.
Nonetheless, Uniwide cites Article (Art. ) 1724 of the New Civil
Code as basis for its claim that it is not liable to pay for
additional works it did not authorize or agree upon in writing.
The provision states:
 
Art. 1724. The contractor who undertakes to build a
structure or any other work for a stipulated price, in
conformity with plans and specifications agreed upon
with the landowner, can neither withdraw from the
contract nor demand an increase in the price on account
of the higher cost of labor or materials, save when there
has been a change in the plans and specifications,
provided:
 
(1)                Such change has been authorized by the
proprietor in writing; and
 
 The additional price to be paid to the
(2)                   
contractor has been determined in writing by both
parties.
 
The Court of Appeals did take note of this provision, but
deemed it inapplicable to the case at bar because Uniwide had
already paid, albeit with unwritten reservations, for the
additional works. The provision would have been operative
had Uniwide refused to pay for the costs of the additional
[27]
works. Instead, the Court of Appeals applied Art. 1423 of
the New Civil Code and characterized Uniwides payment of the
said amount as a voluntary fulfillment of a natural obligation.
The situation was characterized as being akin to Uniwide being
a debtor who paid a debt even while it knew that it was not
legally compelled to do so. As such debtor, Uniwide could no
longer demand the refund of the amount already paid.
 
Uniwide counters that Art. 1724 makes no distinction as to
whether payment for the additional works had already been
made. It claims that it had made the payments, subject to
reservations, upon the false representation of Titan-Ikeda that
the additional works were authorized in writing. Uniwide
characterizes the payment as a mistake, and not a voluntary
fulfillment under Art. 1423 of the Civil Code. Hence, it urges the
application, instead, of the principle of solutio indebiti under
[28] [29]
Arts. 2154 and 2156 of the Civil Code.
 
To be certain, this Court has not been wont to give an
expansive construction of Art. 1724, denying, for example,
[30]
claims that it applies to constructions made of ship vessels,
or that it can validly deny the claim for payment of
[31]
professional fees to the architect. The present situation
though presents a thornier problem. Clearly, Art. 1724 denies,
as a matter of right, payment to the contractor for additional
works which were not authorized in writing by the proprietor,
and the additional price of which was not determined in
writing by the parties.
 
Yet the distinction pointed out by the Court of Appeals is
material. The issue is no longer centered on the right of the
contractor to demand payment for additional works
undertaken because payment, whether mistaken or not, was
already made by Uniwide. Thus, it would not anymore be
incumbent on Titan to establish that it had the right to demand
or receive such payment.
 
But, even if the Court accepts Art. 1724 as applicable in this
case, such recognition does not ipso facto accord Uniwide the
right to be reimbursed for payments already made, since Art.
1724 does not effect such right of reimbursement. It has to be
understood that Art. 1724 does not preclude the payment to the
contractor who performs additional works without any prior
written authorization or agreement as to the price for such
works if the owner decides anyway to make such payment.
What the provision does preclude is the right of the contractor
to insist upon payment for unauthorized additional works.
 
Accordingly, Uniwide, as the owner who did pay the contractor
for such additional works even if they had not been authorized
in writing, has to establish its own right to reimbursement not
under Art. 1724, but under a different provision of law.
Uniwides burden of establishing its legal right to
reimbursement becomes even more crucial in the light of the
general presumption contained in Section 3(f), Rule 131 of the
Rules of Court that money paid by one to another was due to
the latter.
 
Uniwide undertakes such a task before this Court, citing the
provisions on solutio indebiti under Arts. 2154 and 2156 of the
Civil Code. However, it is not enough to prove that the
payments made by Uniwide to Titan were not due because
there was no prior authorization or agreement with respect to
additional works. There is a further requirement that the
payment by the debtor was made either through mistake or
under a cloud of doubt. In short, for the provisions on solutio
indebiti to apply, there has to be evidence establishing the
frame of mind of the payor at the time the payment was made.
[32]
 
The CIAC refused to acknowledge that the additional works on
Project 1 were indeed unauthorized by Uniwide. Neither did
the Court of Appeals arrive at a contrary determination. There
would thus be some difficulty for this Court to agree with this
most basic premise submitted by Uniwide that it did not
authorize the additional works on Project 1 undertaken by
Titan. Still, Uniwide does cite testimonial evidence from the
record alluding to a concession by employees of Titan that
these additional works on Project 1 were either authorized or
[33]
documented.
 
Yet even conceding that the additional works on Project 1 were
not authorized or committed into writing, the undisputed fact
remains that Uniwide paid for these additional works. Thus, to
claim a refund of payments made under the principle of
solutio indebiti, Uniwide must be able to establish that these
payments were made through mistake. Again, this is a factual
matter that would have acquired a mantle of invulnerability
had it been determined by both the CIAC and the Court of
Appeals. However, both bodies failed to arrive at such a
conclusion. Moreover, Uniwide is unable to direct our
attention to any pertinent part of the record that would indeed
establish that the payments were made by reason of mistake.
 
We note that Uniwide alleged in its petition that the CIAC
award in favor of Titan in the amount P5,158,364.63 as the
unpaid balance in Project 3 included claims for additional
works of P1,087,214.18 for which no written authorization was
presented. Unfortunately, this issue was not included in its
memorandum as one of the issues submitted for the resolution
of the Court.
 
Liability for the Value-Added Tax (VAT)
 
The second issue takes us into an inquiry on who, under
the law, is liable for the payment of the VAT, in the absence of a
written stipulation on the matter. Uniwide claims that the VAT
was already included in the contract price for Project 1. Citing
Secs. 99 and 102 of the National Internal Revenue Code,
Uniwide asserts that VAT, being an indirect tax, may be shifted
to the buyer by including it in the cash or selling price and it is
entirely up to the buyer to agree or not to agree to absorb the
[34]
VAT. Thus, Uniwide concludes, if there is no provision in
the contract as to who should pay the VAT, it is presumed that it
[35]
would be the seller.
 
 The contract for Project 1 is silent on which party should
shoulder the VAT while the contract for Project 3 contained a
provision to the effect that Uniwide is the party responsible for
[36]
the payment of the VAT. Thus, when Uniwide paid the
amount of P2,400,000.00 as billed by Titan for VAT, it assumed
that it was the VAT for Project 3. However, the CIAC and the
Court of Appeals found that the same was for Project 1.
 
We agree with the conclusions of both the CIAC and the
Court of Appeals that the amount of P2,400,000.00 was paid by
Uniwide as VAT for Project 1. This conclusion was drawn from
[37]
an Order of Payment dated 7 October 1992 wherein Titan
billed Uniwide the amount of P2,400,000.00 as Value Added Tax
based on P60,000,000.00 Contract, computed on the basis of 4%
of P60,000,000.00. Said document which was approved by the
President of Uniwide expressly indicated that the project
involved was the UNIWIDE SALES WAREHOUSE CLUB &
ADMIN BLDG. located at 90 E. RODRIGUEZ JR. AVE., LIBIS, Q.C.
The reduced base for the computation of the tax, according to
the Court of Appeals, was an indication that the parties agreed
to pass the VAT for Project 1 to Uniwide but based on a lower
contract price. Indeed, the CIAC found as follows:
  
Without any documentary evidence than Exhibit H
to show the extent of tax liability assumed by [Uniwide],
the Tribunal holds that the parties is [sic] obliged to pay
only a share of the VAT payment up to P60,000,000.00
out of the total contract price of P120,936,591.50. As
explained by Jimmy Gow, VAT is paid on labor only
for construction contracts since VAT had already
been paid on the materials purchased. Since labor
costs is [sic] proportionately placed at 60%-40% of the
contract price, simplified accounting computes VAT
at 4% of the contract price. Whatever is the balance for
VAT that remains to be paid on Project 1 Libis shall
remain the obligation of [Titan]. (Emphasis supplied.)
[38]
 
Liquidated Damages
 
On the third issue of liquidated damages, the CIAC rejected
such claim while the Court of Appeals held that the matter
should be left for determination in future proceedings where
the issue has been made clear.
 
In rejecting Uniwides claim for liquidated damages, the
CIAC held that there is no legal basis for passing upon and
resolving Uniwides claim for the following reasons: (1) no
claim for liquidated damages arising from the alleged delay
was ever made by Uniwide at any time before the
commencement of Titans complaint; (2) the claim for
liquidated damages was not included in the counterclaims
stated in Uniwides answer to Titans complaint; (3) the claim
was not formulated as an issue to be resolved by the CIAC in
[39]
the TOR; and (4) no attempt was made to modify the TOR to
accommodate the same as an issue to be resolved.
 
Uniwide insists that the CIAC should have applied Section
[40]
5, Rule 10 of the Rules of Court. On this matter, the Court of
Appeals held that the CIAC is an arbitration body, which is not
necessarily bound by the Rules of Court. Also, the Court of
Appeals found that the issue has never been made concrete
enough to make Titan and the CIAC aware that it will be an
issue. In fact, Uniwide only introduced and quantified its claim
for liquidated damages in its Memorandum submitted to the
CIAC at the end of the arbitration proceeding. The Court of
Appeals also noted that the only evidence on record to prove
delay in the construction of Project 1 is the testimony of Titans
engineer regarding the date of completion of the project while
the only evidence of delay in the construction of Project 3 is the
affidavit of Uniwides President.
  
According to Uniwide, the ruling of the Court of Appeals on
the issue of liquidated damages goes against the established
judicial policy that a court should always strive to settle in one
proceeding the entire controversy leaving no root or branch to
[41]
bear the seeds of future litigations. Uniwide claims that the
required evidence for an affirmative ruling on its claim is
already on the record. It cites the pertinent provisions of the
written contracts which contained deadlines for liquidated
damages. Uniwide also noted that the evidence show that
Project 1 was completed either on 15 February 1992, as found
by the CIAC, or 12 March 1992, as shown by Titans own
evidence, while Project 3, according to Uniwides President, was
completed in June 1993. Furthermore, Uniwide asserts, the
CIAC should have applied procedural rules such as Section 5,
Rule 10 with more liberality because it was an administrative
[42]
tribunal free from the rigid technicalities of regular courts.
 
On this point, the CIAC held:
 
The Rule of Procedure Governing Construction
Arbitration promulgated by the CIAC contains no
provision on the application of the Rules of Court to
 arbitration proceedings, even in a suppletory capacity.
Hypothetically admitting that there is such a provision,
suppletory application is made only if it would not
contravene a specific provision in the arbitration rules
and the spirit thereof. The Tribunal holds that such
importation of the Rules of Court provision on
amendment to conform to evidence would
contravene the spirit, if not the letter of the CIAC
rules. This is for the reason that the formulation of the
Terms of Reference is done with the active participation
of the parties and their counsel themselves. The TOR is
further required to be signed by all the parties, their
respective counsel and all the members of the Arbitral
Tribunal. Unless the issues thus carefully formulated in
the Terms of Reference were expressly showed [sic] to
be amended, issues outside thereof may not be resolved.
As already noted in the Decision, no attempt was ever
made by the [Uniwide] to modify the TOR in order to
accommodate the issues related to its belated
counterclaim on this issue. (Emphasis supplied.)
 
 
Arbitration has been defined as an arrangement for taking
and abiding by the judgment of selected persons in some
disputed matter, instead of carrying it to established tribunals
of justice, and is intended to avoid the formalities, the delay,
[43]
the expense and vexation of ordinary litigation. Voluntary
arbitration, on the other hand, involves the reference of a
dispute to an impartial body, the members of which are chosen
by the parties themselves, which parties freely consent in
advance to abide by the arbitral award issued after
proceedings where both parties had the opportunity to be
heard. The basic objective is to provide a speedy and
inexpensive method of settling disputes by allowing the parties
to avoid the formalities, delay, expense and aggravation which
commonly accompany ordinary litigation, especially litigation
[44]
which goes through the entire hierarchy of courts. As an
arbitration body, the CIAC can only resolve issues brought
before it by the parties through the TOR which functions
similarly as a pre-trial brief. Thus, if Uniwides claim for
liquidated damages was not raised as an issue in the TOR or in
any modified or amended version of it, the CIAC cannot make a
ruling on it. The Rules of Court cannot be used to contravene
the spirit of the CIAC rules, whose policy and objective is to
provide a fair and expeditious settlement of construction
disputes through a non-judicial process which ensures
harmonious and friendly relations between or among the
[45]
parties.
 
 Further, a party may not be deprived of due process of law
by an amendment of the complaint as provided in Section 5,
Rule 10 of the Rules of Court. In this case, as noted by the Court
of Appeals, Uniwide only introduced and quantified its claim
for liquidated damages in its memorandum submitted to the
CIAC at the end of the arbitration proceeding. Verily, Titan was
not given a chance to present evidence to counter Uniwides
claim for liquidated damages.
 
Uniwide alludes to an alleged judicial admission made by
Engr. Luzon Tablante wherein he stated that Project 1 was
completed on 10 March 1992. It now claims that by virtue of
Engr. Tablantes statement, Titan had admitted that it was in
delay. We disagree. The testimony of Engr. Tablante was
offered only to prove that Project 1 was indeed completed. It
was not offered to prove the fact of delay. It must be
remembered that the purpose for which evidence is offered
must be specified because such evidence may be admissible for
several purposes under the doctrine of multiple admissibility,
or may be admissible for one purpose and not for another,
otherwise the adverse party cannot interpose the proper
objection. Evidence submitted for one purpose may not be
 [46]
considered for any other purpose. Furthermore, even
assuming, for the sake of argument, that said testimony on the
date of completion of Project 1 is admitted, the establishment
of the mere fact of delay is not sufficient for the imposition of
liquidated damages. It must further be shown that delay was
attributable to the contractor if not otherwise justifiable.
Contrarily, Uniwides belated claim constitutes an admission
that the delay was justified and implies a waiver of its right to
such damages.
Project 2: as-built plans, overpricing, defective construction
 
To determine whether or not Uniwide is liable for the
unpaid balance of P6,301,075.77 for Project 2, we need to
resolve four sub-issues, namely: (1) whether or not it was
necessary for Titan to submit as-built plans before it can be
paid by Uniwide; (2) whether or not there was overpricing of
the project; (3) whether or not the P15,000,000.00 paid by
Uniwide to Titan for Project 2 constitutes full payment; and (4)
whether or not Titan can be held liable for defective
construction of Project 2.
 
The CIAC, as affirmed by the Court of Appeals, held Uniwide
liable for deficiency relating to Project 2 in the amount of
P6,301,075.77. It is nonetheless alleged by Uniwide that Titan
failed to submit any as-built plans for Project 2, such plans
allegedly serving as a condition precedent for payment.
Uniwide further claims that Titan had substantially
overcharged Uniwide for Project 2, there being uncontradicted
expert testimony that the total cost of Project 2 did not exceed
P7,812,123.60. Furthermore, Uniwide alleged that the works
performed were structurally defective, as evidenced by the
structural damage on four columns as observed on ocular
inspection by the CIAC and confirmed by Titans project
manager.
 
On the necessity of submitting as-built plans, this Court rules
that the submission of such plans is not a pre-requisite for
Titan to be paid by Uniwide. The argument that said plans are
required by Section 308 of Presidential Decree No. 1098
(National Building Code) and by Section 2.11 of its
Implementing Rules before payment can be made is untenable.
The purpose of the law is to safeguard life, health, property,
and public welfare, consistent with the principles of sound
environmental management and control. The submission of
these plans is necessary only in furtherance of the laws
purpose by setting minimum standards and requirements to
control the location, site, design, quality of materials,
construction, use, occupancy, and maintenance of buildings
constructed and not as a requirement for payment to the
[47]
contractor. The testimony of Engr. Tablante to the effect
that the as-built plans are required before payment can be
claimed by Titan is a mere legal conclusion which is not
binding on this Court.
 
Uniwide claims that, according to one of its consultants, the
true price for Project 2 is only P7,812,123.60. The CIAC and the
Court of Appeals, however, found the testimony of this
consultant suspect and ruled that the total contract price for
Project 2 is P21,301,075.77. The CIAC held:
 
 
The Cost Estimate for Architectural and Site
Development Works for the EDSA Central, Dau Branch
Project (Exhibit 2-A for [Uniwide] and made as a
common exhibit by [Titan] who had it marked at [sic] its
own Exhibit U), which was admittedly prepared by
Fermindoza and Associates, [Uniwide]s own architects,
shows that the amount of P17,750,896.48 was arrived at.
Together with the agreed upon mark-up of 20% on
said amount, the total project cost was
P21,301,075.77.
 
The Tribunal holds that the foregoing document is
binding upon the [Uniwide], it being the mode agreed
upon by which its liability for the project cost was to be
determined.[48] (Emphasis supplied.)
 
 
Indeed, Uniwide is bound by the amount indicated in the
above document. Claims of connivance or fraudulent
conspiracy between Titan and Uniwides representatives
which, it is alleged, grossly exaggerated the price may properly
be dismissed. As held by the CIAC:
 
The Tribunal holds that [Uniwide] has not
introduced any evidence to sustain its charge of
fraudulent conspiracy. As a matter of fact, [Uniwide]s
own principal witness, Jimmy Gow, admitted on cross-
 examination that he does not have any direct evidence
to prove his charge of connivance or complicity
between the [Titan] and his own representatives. He
only made that conclusion by the process of his own
logical reasoning arising from his consultation with
other contractors who gave him a much lower estimate
for the construction of the Dau Project. There is thus no
reason to invalidate the binding character of Exhibit
2-A which, it is significant to point out, is [Uniwide]s
[49]
own evidence. (Emphasis supplied.)
 
 
Accordingly, deducting the P15,000,000.00 already paid by
Uniwide from the total contract price of P21,301,075.77, the
unpaid balance due for Project 2 is P6,301,075.77. This is the
same amount reflected in the Order of Payment prepared by
Uniwides representative, Le Consultech, Inc. and signed by no
less than four top officers and architects of Le Consultech, Inc.
endorsing for payment by Uniwide to Titan the amount of
[50]
P6,301,075.77.
 
Uniwide asserts that Titan should not have been allowed to
recover on Project 2 because the said project was defective and
would require repairs in the amount of P800,000.00. It claims
that the CIAC and the Court of Appeals should have applied
[51]
Nakpil and Sons v. Court of Appeals and Art. 1723 of the
New Civil Code holding a contractor responsible for damages if
the edifice constructed falls within fifteen years from
completion on account of defects in the construction or the use
of materials of inferior quality furnished by him or due to any
violation of the terms of the contract.
 
 On this matter, the CIAC conducted an ocular inspection of
the premises on 30 January 1995. What transpired in the said
ocular inspection is described thus:
 
On 30 January 1995, an ocular inspection was
conducted by the Arbitral Tribunal as requested by
[Uniwide]. Photographs were taken of the alleged
construction defects, an actual ripping off of the plaster
of a certain column to expose the alleged structural
defect that is claimed to have resulted in its being
heavily damaged was done, clarificatory questions were
asked and manifestations on observations were made by
the parties and their respective counsels. The entire
proceedings were recorded on tape and subsequently
transcribed. The photographs and transcript of the
ocular inspection form part of the records and
considered as evidence.[52]
 
And, according to these evidence, the CIAC concluded as
follows:
 
It is likewise the holding of this Tribunal that
[Uniwide]s counterclaim of defective construction
has not been sufficiently proven. The credibility of
Engr. Cruz, [Uniwide]s principal witness on this
issue, has been severely impaired. During the ocular
inspection of the premises, he gave such assurance of
the soundness of his opinion as an expert that a certain
column was heavily damaged judging from the external
cracks that was readily apparent x x x
 
 xxxx
 
On insistence of the Tribunal, the plaster was
chipped off and revealed a structurally sound
column x x x
Further, it turns out that what was being passed off
as a defective construction by [Titan], was in fact an
old column, as admitted by Mr. Gow himself x x x x[53]
(Emphasis supplied.)
 
 
Uniwide had the burden of proving that there was
defective construction in Project 2 but it failed to discharge this
burden. Even the credibility of its own witness was severely
impaired. Further, it was found that the concrete slab placed
by Titan was not attached to the old columns where cracks
were discovered. The CIAC held that the post-tensioning of the
new concrete slab could not have caused any of the defects
manifested by the old columns. We are bound by this finding of
fact by the CIAC.
 
It is worthy to stress our ruling in Hi-Precision Steel Center,
[54]
Inc. v. Lim Kim Steel Builders, Inc. which was reiterated in
[55]
David v. Construction Industry and Arbitration Commission,
that:
 
x x x Executive Order No. 1008 created an arbitration
facility to which the construction industry in the
Philippines can have recourse. The Executive Order
was enacted to encourage the early and expeditious
settlement of disputes in the construction industry, a
public policy the implementation of which is
necessary and important for the realization of
national development goals.
 
Aware of the objective of voluntary arbitration in
the labor field, in the construction industry, and in any
other area for that matter, the Court will not assist one
or the other or even both parties in any effort to subvert
or defeat that objective for their private purposes. The
Court will not review the factual findings of an
arbitral tribunal upon the artful allegation that such
body had "misapprehended facts" and will not pass
upon issues which are, at bottom, issues of fact, no
matter how cleverly disguised they might be as "legal
questions." The parties here had recourse to
arbitration and chose the arbitrators themselves;
they must have had confidence in such arbitrators.
The Court will not, therefore, permit the parties to
relitigate before it the issues of facts previously
presented and argued before the Arbitral Tribunal,
save only where a clear showing is made that, in
reaching its factual conclusions, the Arbitral
Tribunal committed an error so egregious and
hurtful to one party as to constitute a grave abuse of
discretion resulting in lack or loss of jurisdiction.
Prototypical examples would be factual conclusions of
the Tribunal which resulted in deprivation of one or the
other party of a fair opportunity to present its position
before the Arbitral Tribunal, and an award obtained
through fraud or the corruption of arbitrators. Any
other, more relaxed rule would result in setting at
naught the basic objective of a voluntary arbitration
 and would reduce arbitration to a largely inutile
institution. (Emphasis supplied.)
 
WHEREFORE, premises considered, the petition is DENIED
and the Decision of the Court of Appeals dated 21 February
1996 in CA-G.R. SP No. 37957 is hereby AFFIRMED.
 
SO ORDERED.
 
DANTE O. TINGA
Associate Justice
 
 
 
 
WE CONCUR:
 
 
 
 
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
 
 
 
 
 
ANTONIO T. CARPIO CONCHITA CARPIO MORALES
Associate Justice Associate Justice
 
 
 
 
PRESBITERO J. VELASCO, JR.
Associate Justice
 
 
 
ATTESTATION
 
I attest that the conclusions in the above Decision had
been reached in consultation before the case was assigned to
the writer of the op4inion of the Courts Division.
 
LEONARDO A. QUISUMBING
Associate Justice
Chairperson, Third Division
 
 
 
CERTIFICATION
 
Pursuant to Section 13, Article VIII of the Constitution,
and the Division Chairpersons Attestation, it is hereby
certified that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.
 
 
REYNATO S. PUNO
Chief Justice
 
 
 
 
 

 
[1]
Rollo, pp. 10-33, 54-77 and 155-178. The dispositive portion of the said
decision states:
WHEREFORE, the judgment of the CIAC herein appealed from is
hereby MODIFIED in the following respects:
 
a)       The ruling holding petitioner liable directly to the BIR for
the VAT on Project 3 and exempting respondent from the said
obligation is hereby DELETED, and in lieu thereof, judgment is
hereby rendered that the Value-Added Tax for Project 3, as
determined by the BIR may be passed on to the petitioner, subject
to such defenses as it may raise with regard to its computation;
b)       The denial of petitioners claims for liquidated damages is
hereby made without prejudice;
c)            The interest of 12% per annum attached to the unpaid
balances for Projects 2 and 3 is hereby REDUCED to 6% per
annum.
In all other aspects, the said judgment is hereby AFFIRMED.
 
 SO ORDERED.
 
[2]
Id. at 225-249.
 
[3]Id. at 293-307. Docketed as Civil Case No. 98-0814.
 
[4]
Id. at 308; Under Executive Order No. 1008 (Construction Industry
Arbitration Law).
 
[5]
Docketed as CIAC Case No. 13-94.
 
[6]
Rollo, pp. 261-267.
 
[7]
Id. at 261-267.
 
[8]Uniwide claims that Titan allegedly admitted that the building was
completed only on 12 March 1992, which date was reflected in Titans
Opposition to Partial Motion for Reconsideration dated 10 May 1996.
 
 
[9]
Rollo, pp. 285-292.
 
[10]
Id. at 286-292.
 
[11]
Id. at 225-248.
 
[12]
Id. at 246-247.
 
[13]
Docketed as CA-G.R. SP No. 37857.
 
[14]Rollo, pp. 180-183.
 
 [15]Id. at 344-373. See Petitioners Memorandum.
 
[16]See Megaworld Globus Asia, Inc. v. DSM Construction and Development
Corporation, G.R. No. 153310, 2 March 2004, 424 SCRA 179, 197.
 
[17]See David v. Construction Industry and Arbitration Commission, G.R. No.
159795, 30 July 2004, 435 SCRA 654, 666.
 
[18]
Id.
 
[19]Id.
 
[20]Megaworld Globus Asia, Inc. v. DSM Construction and Development
Corporation, supra note 15 at 198.
 
[21]Hi-Precision Steel Center, Inc. v. Lim Kim Steel Builders, Inc., G.R. No.
110434, 13 December 1993, 228 SCRA 397, 405.
 
[22]
Metro Construction, Inc. v. Chatham Properties, Inc., 418 Phil. 176
(2001).
 
[23]Megaworld Globus Asia, Inc. v. DSM Construction and Development
Corporation, supra.
 
 
[24]
G.R. No. 110434, 13 December 1993, 228 SCRA 397.
 
[25]418 Phil. 176 (2001).
 
[26]G.R. No. 153310, 2 March 2004, 424 SCRA 179 (2004).
 
 [27]
Art. 1423. Obligations are civil or natural. Civil obligations give a right
of action to compel their performance. Natural obligations, not being based on
positive law but on equity and natural law, do not grant a right of action to
enforce their performance, but after voluntary fulfillment by the obligor, they
authorize the retention of what has been delivered or rendered by reason
thereof. Some natural obligations are set forth in the following articles.
 
[28]
Art. 2154. If something is received when there is no right to demand it,
and it was unduly delivered through mistake, the obligation to return it arises.
 
[29]
Art. 2156. If the payer was in doubt whether the debt was due, he may
recover if he proves that it was not due.
 
[30]
See Royal Lines, Inc. v. Court of Appeals, 227 Phil. 570 (1986)
 
[31]
See Arenas v. Court of Appeals, G.R. No. 56524, 27 January 1989, 169
SCRA 558.
 
[32]
Rollo, p. 232. On this score, the CIAC made two crucial conclusions:
The Tribunal finds that the evidence sufficiently establishes
this issue in favor of the [Titan]. The fact that [Uniwide]
had paid the claim for said additional works implies that
the additional works were actually done and that they
had been duly authorized. Otherwise, Jimmy Gow would
not have instructed his daughter-treasurer to make
payments for them.
 
What [Uniwide] merely complains about is that there
were no sufficient documents that had been attached by the
[Titan] in support of its billings therefor. That claim of
[Uniwide] has not been substantiated despite Cherrie Gows
undertaking to do so. But even hypothetically assuming that
claim to be established, it would not help [Uniwide] any. The
presumption is that payment is made for something that
is due. Thus, [S]ection 3(f), Rule 131 of the Revised Rules of
 Evidence provides that money paid by one to another was
due to the latter.
 
If payment was made by mistake for an obligation not
due, [Uniwide] has the burden of proving that claim in
order to get a refund. This burden was not discharged by
[Uniwide]. Sufficient documentation surely does not
establish that payment was not due. All it establishes is
carelessness on the part of [Uniwide]. Not having been
contradicted and overcome[d] by any evidence adduced
by [Uniwide], the presumption enjoyed by the [Titan] on
this issue is satisfactory in accordance with the
foregoing cited procedural rule. (Emphasis supplied.)
 
 
[33]
See rollo, pp. 356, 360-361.
 
[34]
Citing BIR Ruling No. 242, dated 6 June 1988.
 
[35]
Citing BIR Ruling No. 131, dated 31 August 1994.
 
[36]
See rollo, pp. 597-604. No. 2 of Article IV of the contract states that It is
agreed that the value-added-tax shall be for the OWNERs account. Uniwide is
the OWNER referred by this stipulation.
 
[37]
Id. at 440. This document is referred in the CIAC and CA decisions as
Exbihit H.
 
[38]
Id. at 237.
 
[39]
The CIAC noted that the Terms of Reference (TOR) functions similarly
as a pre-trial order in a judicial proceeding.
 
[40]RULES OF COURT, Rule 10, Section 5 states:
  
SEC. 5. Amendment to conform to or authorize presentation of evidence.
When issues not raised by the pleadings are tried with the express or implied
consent of the parties, they shall be treated in all respects as if they had been
raised in the pleadings. Such amendment of the pleadings as may be necessary
to cause them to conform to the evidence and to raise these issues may be made
upon motion of any party at any time, even after judgment; but failure to
amend does not affect the result of the trial of these issues. If evidence is
objected to at the trial on the ground that it is not within the issues made by the
pleadings, the court may allow the pleadings to be amended and shall do so
with liberality if the presentation of the merits of the action and the ends of
substantial justice will be subserved thereby. The court may grant a
continuance to enable the amendment to be made.
 
[41]
Citing Gokongwei, Jr. v. Securities and Exchange Commission, et al., No.
L- 45911, 11 April 1979, 89 SCRA 336, 360-361, Galan Realty Co., Inc. v. Arranz,
A.M. No. MTJ-93-878, 27 October 1994, 237 SCRA 770, 776; and Caltex Philippines,
Inc. v. Intermediate Appellate Court, G.R. No. 74730, 25 August 1989,176 SCRA
741, 753.
 
[42]Citing Bautista v. Secretary of Labor and Employment, 196 SCRA 470,
475 and Realty Exchange Venture Corporation v. Sendino, G.R. No. 109703, 5 July
1994, 233 SCRA 665, 671. See also RULES OF PROCEDURE GOVERNING
CONSTRUCTION ARBITRATION.
 
[43]
BLACKS LAW DICTIONARY (6th Edition), p. 105.
 
[44]Supra note 23, at 405
 
[45]
RULES OF PROCEDURE GOVERNING CONSTRUCTION ARBITRATION,
ART. 1, Sec. 1.
 
[46]
REGALADO, REMEDIAL LAW COMPENDIUM (Vol. II), pp. 694-695.
 
 [47]
NATIONAL BUILDING CODE OF THE PHILIPPINES, Sec. 102.
 
[48]Rollo, p. 238.
 
[49]
Id. at 239.
 
[50]
Rollo, p. 443.
 
[51]
G.R. No. L-47851, 3 October 1986, 144 SCRA 596.
 
[52]
Id. at 226.
 
[53]
Id. at 242.
 
[54]
Supra note 23, at 405-406.
 
[55]Supra note 16, at 666-667.